Avis 2007 Annual Report Download - page 30

Table of Contents
by any third party. If either Realogy or Wyndham were to default in its payment, when due, of any such Assumed Obligations, each non-
defaulting party, including us, would be required to pay an equal portion of the amounts in default.
On April 10, 2007, Realogy was acquired by an affiliate of Apollo Management VI, L.P. and is no longer listed as an independent public
company. The acquisition does not affect Relaogy’s obligation to satisfy 62.5% of the Assumed Obligations. However, as a result of the
acquisition, Realogy has greater debt obligations and its ability to satisfy its portion of such Assumed Obligations may be adversely impacted.
In accordance with the terms of the Separation Agreement, Realogy posted a letter of credit in April 2007 for the benefit of the Company to
cover its estimated share of the Assumed Obligations, which is subject to adjustment from time to time, although there can be no assurance that
such letter of credit will be sufficient or effective to cover Realogy’s actual obligations if and when they arise. In addition, the Separation
Agreement effectively provides Realogy with the right to control the process for resolving disputes related to many of the Assumed
Obligations.
Moreover, the Separation Agreement provides for cross-indemnities designed to place financial responsibility of certain liabilities and other
obligations with the proper company. For example, Realogy, Wyndham Worldwide and/or Travelport are required to indemnify us in respect of
certain effective guarantees that result from either us or one of our subsidiaries remaining a named lessee on real estate leases pertaining to
properties occupied by Realogy, Wyndham and/or Travelport. Any failure by Realogy, Wyndham Worldwide or Travelport to pay any of their
assumed liabilities when due or to indemnify us when required may adversely impact our results of operations.
Risks related to our common stock
The market price of our shares may fluctuate widely.
We cannot predict the prices at which our common stock will trade. The market price of our common stock may fluctuate widely, depending
upon many factors, some of which may be beyond our control, including:
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. These
broad market fluctuations may adversely affect the trading price of our common stock.
Your percentage ownership may be diluted in the future.
Your percentage ownership may be diluted in the future because of equity awards that we granted to our directors, officers and employees and
the accelerated vesting of other equity awards. As disclosed in the notes to
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our quarterly or annual earnings, or those of other companies in our industry;
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actual or anticipated fluctuations in our operating results;
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changes in accounting standards, policies, guidance, interpretations or principles;
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announcements by us or our competitors of significant acquisitions or dispositions;
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changes in earnings estimates by securities analysts or our ability to meet those estimates;
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the operating and stock price performance of other comparable companies;
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overall market fluctuations; and
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general economic conditions.